While the COVID pandemic might seem like a distant memory that started about five years ago, the truth of the matter is that we are still not over the impact of the lockdowns or other COVID measures. The fact that there are multiple impacts does not shock me in the slightest. I was against lockdowns before they started in the United States, and I was adamantly opposed once implemented because of the harm it was going to cause. This is hardly the "I told you so" I want to write, but here we are. I was thinking about this enough where I decided to write a multi-part blog series on how we still feel that impact to this day.
Part I covered the health-related suffering, whether that was greater backlog in health services, higher obesity rates, higher rates of substance abuse, or less trust in public health experts. In Part III, I intend on covering the political costs that we still pay today. As for Part II right now, I will cover the costs related to the economy.
School closures harmed the economic future of today's children. School closures meant that students were unable to effectively learn. In terms of academic achievement, students have still not recovered from the pandemic. As I pointed out in 2022, that loss in academic achievement and attainment will translate into diminished wages in the future. Not only will it reduce wages, but life expectancy, thereby diminishing their quality of life in the long-run. So much for the mantra "Think of the children!"
Lockdowns stunted our social skills and socializing, and by extension, can impact the economy. As I wrote in 2023, the lockdowns lowered children's social-emotional skills in comparison to the pandemic. That makes sense because childhood is a formative moment in one's emotional development and depriving children of socialization erodes social skills. While children were the most affected, they were not the only ones affected.
According to a recent study from the Journal of the American Planning Association conducted by researchers at UCLA and Clemson University, people spend an average of 51 minutes a day on out-of-home activities than they did pre-pandemic (Morris et al., 2024). This 51 minutes does not count the reduction of 12 minutes for daily travel. There also seems to have been at least some impact on college students, as well (Cerutti et al., 2024). Less socializing not only has impact on our mental health, but less socializing and going out can mean less economic growth.
Increased poverty and income inequality, especially in developing countries. Before the pandemic in 2019, 37 percent of U.S. citizens could not cover a $400 emergency without needing to borrow or sell something (Federal Reserve). Economic insecurity was even more pronounced in developing countries, where 50 percent of households could not able to sustain basic consumption in the event of income loss for more than three months (Badarinza et al., 2019). As the World Bank illustrates (but does not explicitly state), having to endure lockdowns for multiple months exacerbated income inequality.
As the International Monetary Fund points out, the ability to work remotely is highly correlated with education, and thus pre-pandemic earnings. This was more pronounced during the pandemic because those who worked remotely during the pandemic were able to maintain their financial status better than those who could not. As the IMF shows in another research paper (Fuceri et al., 2021), this trend impacted employment of lower-income households. Since it diminished the employment prospects of these individuals, the effects of lockdowns continue to exacerbate income inequality, and by extension, their future earnings.
Federal debt made worse by policy choices. As I covered last year, the greater the COVID restrictions, the greater the budget deficit due to the economic downturn. The Coronavirus Aid, Relief, and Economic Security (CARES) Act cost over $2 trillion, with the American Rescue Plan (ARP) Act costing $1.9 trillion. And that was just the COVID-related Federal spending in the United States during the pandemic.
The trajectory of U.S. debt was already not in a good place before the pandemic. As I brought up during the pandemic, greater debt means more interest payments and less savings and investment for citizens. Because Trump is not showing any interest in reducing debt in any significant way, the federal debt gained during the pandemic combined with greater anticipated deficits will ultimately diminish quality of life for us all. Sadly, this was not a strictly U.S.-based phenomenon. Average global debt levels have increased by 12 percentage points as a result of profligate spending during the pandemic.
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